Futures lower as investors pause after rally; ZNGA tumbles

U.S. stock index futures were in negative territory Friday following the recent rally and as investors hesitated to jump in ahead of next week's Federal Reserve meeting and non-farm payrolls report.

"With the Fed meeting and non-farm payrolls due next week, there will be plenty of news to move the market in the week ahead," said Rebecca O'Keeffe, head of investment at Interactive Investor. "U.S. data has been more mixed in recent weeks, suggesting that next Friday's employment report may not be as good as recent months, in part because the housing market does look to have softened in light of higher interest rates."

Among earnings, Amazon.com declined after the Internet retail giant reported an unexpected loss and issued a cautious current-quarter forecast as it continues to invest in new areas like cloud computing services.

Starbucks rallied after the coffeehouse chain topped earnings expectations and also forecast current-quarter profit above Street consensus. The company also boosted its full-year guidance as its new menu offerings helped drive customer traffic.

Zynga plunged more than 20 percent after the social video game maker handed in current-quarter guidance that widely missed forecasts. In addition, the company said it has decided not to pursue a license for real money gambling in the U.S.

More than 45 percent of S&P 500 companies have reported results so far this quarter, with 68 percent of firms topping earnings expectations and 56 percent beating revenue estimates, according to data from Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 4.1 percent from last year's second quarter.

Friday will be relatively quiet on the data front, with just the Reuters/Michigan Consumer Sentiment Index due at 9:55 a.m. ET. Economists expect the index to come in at 84.0, compared to the preliminary July reading of 83.9 and June's final 84.1.

European shares were higher in morning trade on Friday after a raft of corporate earnings boosted investor confidence. By contrast, Japan's Nikkei tumbled to its lowest level in nearly three weeks, as the yen strengthened against the dollar. The rest of Asia traded mixed as attention turned to the region's corporate earnings results.